The determinants of occupational fraud: an analysis using the new fraud star theory

Purpose: This research aims to analyze the factors influencing occupational fraud in the Indonesian banking sector through the lens of New Fraud Star Theory, which extends fraud models by incorporating external scope, internal scope, and organizational culture elements.

Methodology/approach: The research uses a mixed-method approach, utilizing both quantitative and qualitative data. Quantitative data was collected through questionnaires from 150 respondents across seven banks in the same region, using convenience sampling and analyzed using SmartPLS 4.0., while qualitative insights were gathered through semi-structured interviews with bank officials to provide deeper understanding of the quantitative findings.

Findings: The research results show that pressure, opportunity, rationalization, and capacity significantly influence occupational fraud in a positive direction. Contrary to theoretical predictions, organizational culture demonstrates a positive relationship with fraud occurrence, particularly influenced by the local 'ewuh pakewuh' phenomenon, while external scope (punishment) and internal scope (whistleblowing mechanisms) show no significant deterrent effect on fraud occurrence.

Practical and Theoretical contribution/Originality: This research extends fraud theory by revealing the complex interplay between fraud elements and cultural contexts in Indonesian banking, uniquely demonstrating how local cultural phenomena can undermine formal fraud prevention mechanisms.

Research Limitation: The research object only uses convenience sampling and is geographically focused on a specific region in Indonesia, while the reliance on perception-based data may not fully capture actual fraud occurrences due to the sensitive nature of the topic.